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Energy-Tel, LLC Energy Update January 10, 2013

- Thursday, January 10, 2013

The Henry Hub spot pricing closed this week (Wednesday, January 9 at $3.14 per MMBtu, down 14 cents from last week’s $3.30 (Wednesday, January 2, 2013).  The NYMEX near-month February 2013 futures contract pricing was down 12 cents from last Wednesday ($3.233 per MMBtu )closing this Wednesday at $3.113 per MMBtu.

 

According to BENTEK Energy LLC estimates, overall natural gas demand per day fell 8 percent over last week.  Residential and commercial natural gas consumption was up 12.8 percent week-on-week.  Power sector and industrial also fell.

 

According to EIA Weekly Natural Gas Storage Report working natural gas in storage was 3,316 Bcf on Friday, January 4.  This represents an implied net withdrawal of 201 Bcf from the previous week.  Stocks were 88 Bcf (2.6%) below than last year at the same time and 320 Bcf (10.7%) above the 5 year average.

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

 

**This analysis contained herein is based upon information Energy-Tel, LLC reasonably believes to be accurate.  However, they do not guarantee the accuracy of the analysis.**

 

THE LAST WORD:   “Work like you don't need the money, love like you've never been hurt and dance like no one is watching.”   

Randall G Leighton

Energy-Tel, LLC, Energy Update January 4, 2013

- Friday, January 04, 2013

Factors Affecting Natural Gas Prices – Basics

Natural gas prices are a function of market supply and demand. Because of limited alternatives for natural gas consumption or production in the short run, even small changes in supply or demand over a short period can result in large price movements to bring supply and demand back into balance. See Today in Energy, June 11, 2012 for recent examples.

Factors on the supply side that may affect prices include:

  • Variations in the amount of natural gas being produced
  • The volume of gas being imported and/or exported
  • The amount of gas in storage facilities (referred to as storage levels)

 

Increases in supply result in lower prices, and decreases in supply tend to increase prices.

Factors on the demand side that may affect prices include:

  • The level of economic growth
  • Variations in winter and summer weather
  • Oil prices

Higher demand tends to lead to higher prices, while lower demand tends to lead to lower prices.

Domestic Supply and Prices Can Be Cyclical

Most of the natural gas consumed in the United States comes from domestic production. U.S. production increased from 2006 through 2011, when it reached the highest recorded annual total since 1973. The increases in production were the result of more efficient, cost-effective drilling techniques, notably in the production of natural gas from shale formations.

Increased natural gas supply tends to dampen prices. In turn, lower prices can erode incentive for drilling, which eventually results in decreased production.

Severe Weather Can Disrupt Production

Hurricanes and other severe weather can affect the supply of natural gas. For example, in the summer of 2005, hurricanes along the U.S. Gulf Coast caused the equivalent of about 4% of U.S. total production to be shut in between August 2005 and June 2006.

Imports Contribute to our Supply of Natural Gas

In 2011, U.S. pipeline imports amounted to almost 13% of total natural gas consumption. More than 99% of the pipeline-imported natural gas came from Canada, with the remainder from Mexico. U.S. pipeline imports are expected to decline in the future because of robust U.S. production.

Economic Growth Can Affect Natural Gas Demand and Prices

The strength of the economy is a major factor influencing natural gas markets. During periods of economic growth, the increased demand for goods and services from the commercial and industrial sectors generates an increase in natural gas demand. This is particularly true in the industrial sector, which is the leading consumer of natural gas as both a plant fuel and as a feedstock for many products such as fertilizer and pharmaceuticals. The increased demand can lead to increased production, and, in general, higher prices. Declining or weak economic growth tends to have the opposite effect.

Winter Weather Strongly Influences Residential and Commercial Demand

During cold months, residential and commercial end users consume natural gas for heating, which places upward pressure on prices as demand increases. If unexpected or severe weather occurs, the effect on prices intensifies because supply is often unable to react quickly to the short-term increased level of demand. These effects of weather on natural gas prices may be exacerbated if the natural gas transportation system is already operating at full capacity. Under these conditions, prices tend to increase, which reduces overall demand for natural gas and brings the market into balance. Natural gas supplies that were placed in storage during periods of lesser demand may be used to cushion the impact of high demand during cold weather.

Hot Summer Weather Can Increase Power Plant Demand for Gas

Temperatures also can have an effect on prices in the cooling, season as many electric power plants that are operated to meet air-conditioning needs in the summer are fueled by natural gas. Hotter-than-normal temperatures can increase natural gas demand and push up prices.

Natural Gas Supplies Held in Storage Play a Key Role in Meeting Peak Demand

The overall supply picture is also influenced by the level of gas held in underground storage fields. Natural gas in storage is a critical supply component during the heating season that helps satisfy sudden shifts in supply and demand, accommodates stable production rates, and supports pipeline operations and hub services. Levels of natural gas in storage typically increase during the refill season (April through October), when demand for natural gas is low, and decrease during the heating season (November through March), when space heating demand for natural gas is high. Natural gas in storage represents an incremental source of supply immediately available to the market. This can counteract the effects of sudden increases in demand for natural gas or supply disruptions such as pipeline outages that cause demand to exceed supply and thus lead to higher prices.

Competition With Other Fuels Can Influence Natural Gas Prices

Large-volume gas consumers (primarily industrial consumers and electricity generators) can switch between natural gas, coal, and oil, depending on the prices of each fuel. Because of the interrelationship between these fuel markets, when prices of the other fuels fall, any resultant shift in demand from natural gas to coal or oil reduces gas demand and pulls gas prices downward. When prices of the competing fuels rise relative to natural gas prices, there may be switching from the competing fuels to natural gas, increasing the demand for natural gas and pushing gas prices upward.

Although most of the switching occurs between natural gas and oil, natural gas and coal markets can also interact when the price of natural gas falls significantly. Electricity generation using natural gas can become attractive relative to coal-fired electricity generation in some areas of the country when the price of gas on an energy equivalent basis becomes less than the price of coal.

(Source: U.S. Energy Information Administration (June 2012))

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

Energy-Tel, LLC - Energy Update - December 20, 2012

- Thursday, December 20, 2012

The Henry Hub spot pricing closed this week (Wednesday, December 19) at $3.25 per MMBtu, down 8 cents from last week’s $3.33 (Wednesday, December 12).  The NYMEX near-month January 2013 futures contract pricing was down 6.2 cents from last Wednesday closing this Wednesday at $3.320 per MMBtu.

 

According to BENTEK Energy LLC estimates, overall natural gas demand per day fell 0.2 percent over last week.  Residential and commercial natural gas consumption was up 0.8 percent week-on-week.  Power sector consumption was down 2.5 percent.

 

According to EIA Weekly Natural Gas Storage Report working natural gas in storage was 3,274 Bcf on Friday, December 14.  This represents an implied net withdrawal of 8.2 Bcf from the previous week.  Stocks were 66 Bcf  higher than last year at the same time and 345 Bcf above the 5 year average.

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

 

**This analysis contained herein is based upon information Energy-Tel, LLC reasonably believes to be accurate.  However, they do not guarantee the accuracy of the analysis.**

 

THE LAST WORD:   “Business has only two basic functions – Marketing and innovation.”  Peter Drucker

Energy-Tel, LLC - Energy Update - December 13, 2012

- Thursday, December 13, 2012

The Henry Hub spot pricing closed this week (Wednesday, December 12) at $3.33 per MMBtu, down 8 cents from last week’s $3.41 (Wednesday, December 5).  The NYMEX near-month January 2013 futures contract pricing was down 31.8 cents from last Wednesday closing this Wednesday at $3.382 per MMBtu.

 

According to BENTEK Energy LLC estimates, overall natural gas demand per day rose 14.5 percent over last week.  Residential and commercial natural gas consumption was up 28.7 percent week-on-week with an increase in industrial consumption of 2.0 percent.  Power sector consumption was up 7.0 percent.

 

According to EIA Weekly Natural Gas Storage Report working natural gas in storage increased to 3,806 Bcf on Friday, December 7.  This represents an implied net injection of 2 Bcf from the previous week.  Stocks were 48 Bcf  (1.3%) higher than last year at the same time and 283 Bcf (8.0%) above the 5 year average.

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

 

**This analysis contained herein is based upon information Energy-Tel, LLC reasonably believes to be accurate.  However, they do not guarantee the accuracy of the analysis.**

 

THE LAST WORD:   “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change–  Charles Darwin

Energy-Tel, LLC Energy Update December 6 2012

- Thursday, December 06, 2012

The Henry Hub spot pricing closed this week (Wednesday, December 5) at $3.41 per MMBtu, down 29  cents from last week’s $3.70 (Wednesday, November 28).  The NYMEX near-month January 2013 futures contract pricing was down 10.1 cents from last Wednesday closing this Wednesday at $3.700 per MMBtu.

 

According to BENTEK Energy LLC estimates, overall natural gas demand per day fell 11.9 percent over last week.  Residential and commercial natural gas consumption was down 23.5 percent week-on-week with an decrease in industrial consumption of 2.1 percent.  Power sector consumption dropped 0.2 percent.

 

According to EIA Weekly Natural Gas Storage Report working natural gas in storage decreased to 3,804 Bcf on Friday, November 30.  This represents an implied net withdrawal of 73 Bcf from the previous week.  Stocks were 33 Bcf less than last year at the same time and 168 Bcf above the 5 year average.

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

 

**This analysis contained herein is based upon information Energy-Tel, LLC reasonably believes to be accurate.  However, they do not guarantee the accuracy of the analysis.**

 

THE LAST WORD:  “In the end, you’re measured not by how much you undertake but by what you finally accomplish.”  Donald Trump

 

Energy-Tel, LLC - Energy Update - November 29, 2012

- Thursday, November 29, 2012

The Henry Hub spot pricing closed this week (Wednesday, November 28 at $3.70 per MMBtu, up 11 cents from last week’s $3.59 (Wednesday, November 21).  The NYMEX near-month December 2012 futures contract pricing was down 20.7 cents from last Wednesday ($3.903 per MMBtu) closing this Wednesday at $3.696 per MMBtu.

 

According to BENTEK Energy LLC estimates, overall natural gas demand per day rose 8.7 percent over last week.  Residential and commercial natural gas consumption was up 22.2 percent week-on-week with an increase in industrial consumption of 1.9 percent.  Power sector consumption dropped 4.9 percent.

 

According to EIA Weekly Natural Gas Storage Report working natural gas in storage increased to 3,877 Bcf on Friday, November 23.  This represents an implied net injection of 4 Bcf from the previous week.  Stocks were 26 Bcf  higher than last year at the same time and 190 Bcf above the 5 year average.

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

 

**This analysis contained herein is based upon information Energy-Tel, LLC reasonably believes to be accurate.  However, they do not guarantee the accuracy of the analysis.**

 

THE LAST WORD:

 "I find that the harder I work the more luck I seem to have." - Thomas Jefferson

Energy-Tel LLC Energy Update November 15, 2012

- Friday, November 16, 2012

The Henry Hub spot pricing closed this week (Wednesday, November 14) at $3.66 per MMBtu, up 19 cents from last week (Wednesday, November 7).  The NYMEX December 2012 futures contract pricing was up 18.2 cents from last Wednesday ($3.578 per MMBtu) closing this Wednesday at $3.760 per MMBtu.

 

According to BENTEK Energy LLC estimates, overall natural gas demand per day rose 0.4 percent over last week.  Residential and commercial natural gas consumption was up 2.8 percent week-on-week with slight industrial decrease of 0.5 percnt. Power sector consumption dropped 2.3 percent.

 

According to EIA Weekly Natural Gas Storage Report working natural gas in storage dropped to 3,911 Bcf on Friday, November 9.  This represents an implied net withdrawal of 18 Bcf from the previous week.  Stocks were 71 Bcf  higher than last year at the same time and 209 Bcf above the 5 year average.

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

 

**This analysis contained herein is based upon information Energy-Tel, LLC reasonably believes to be accurate.  However, they do not guarantee the accuracy of the analysis.**

 

THE LAST WORD:

 “Learn to listen. Opportunity could be knocking at your door very softly.”  Frank Tyger

Energy-Tel LLC Energy Update November 8 2012

- Friday, November 09, 2012

The Henry Hub spot pricing closed this week (Wednesday, November 7) at $3.47 per MMBtu, down 3 cents from last week (Wednesday, November 1).  The NYMEX December 2012 futures contract pricing was down 3.1 percent from last Wednesday ($3.691 per MMBtu) closing this Wednesday at $3.578 per MMBtu.

 

According to BENTEK Energy LLC estimates, overall natural gas demand per day rose 7.5 percent over last week.  Residential and commercial natural gas consumption was up 22.8 percent week-on-week with slight industrial increase from last report. Power sector consumption dropped 3.7 percent.

 

According to EIA Weekly Natural Gas Storage Report working natural gas in storage rose to 3,929 Bcf on Friday, November 2.  This represents a net injection of 21 Bcf from the previous week.  Stocks were 109 Bcf  (2.9%) higher than last year at the same time and 2.44 Bcf  (6.6%) above the 5 year average.

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

 

**This analysis contained herein is based upon information Energy-Tel, LLC reasonably believes to be accurate.  However, they do not guarantee the accuracy of the analysis.**

 

THE LAST WORD: “The first step toward change is awareness. The second step is acceptance.
Nathaniel Branden

Energy-Tel, LLC Energy Update November 1 2012

- Friday, November 02, 2012

The Henry Hub spot pricing closed this week (Wednesday, October 31) at $3.50 per MMBtu, up 7cents from last week (Wednesday, October 24).  The NYMEX December 2012 futures contract pricing was down from last Wednesday ($3.776 per MMBtu) closing this Wednesday at $3.692 per MMBtu . The November contract expired October 29 at $3.471 per MMBtu.

 

According to BENTEK Energy LLC estimates, overall natural gas demand per day rose 9.1 percent over last week.  Residential and commercial natural gas consumption was up 34.8 percent from last report with a decrease in the power sector.

 

According to EIA Weekly Natural Gas Storage Report working natural gas in storage rose to 3,908 Bcf on Friday, October 26.  This represents a net injection of 65 Bcf from the previous week.  Stocks were 136 Bcf  (3.6%) higher than last year at the same time and 259 Bcf  (7.1%) above the 5 year average.

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

 

**This analysis contained herein is based upon information Energy-Tel, LLC reasonably believes to be accurate.  However, they do not guarantee the accuracy of the analysis.**

 

THE LAST WORD:  Attitude is a little thing that makes a big difference.”  ~Winston Churchill

Energy-Tel LLC - Energy Update October 25, 2012

- Friday, October 26, 2012

The Henry Hub spot pricing closed this week (Wednesday, October 24) at $3.43 per MMBtu, up 19 cents from last week (Wednesday, October 17).  The NYMEX November 2012 futures contract pricing was down from last Wednesday ($3.470 per MMBtu) closing this Wednesday at $3.450 per MMBtu .

 

According to BENTEK Energy LLC estimates, overall natural gas demand fell 2.9 percent. Residential and commercial natural gas consumption was down 4.8 percent from last report with a decrease in the industrial demand down by 0.9 percent and the power sector down 2.8 percentfor the report week.

 

According to EIA Weekly Natural Gas Storage Report working natural gas in storage rose to 3,843 Bcf on Friday, October 19.  This represents a net injection of 67 Bcf from the previous week.  Stocks were 153 Bcf  (4.1%) higher than last year at the same time and 251 Bcf  (7.%) above the 5 year average.

 

Please feel free to give me a call to discuss any questions you may have about your specific energy plan.

 

Tony Gattuso

(800)708-3086

 

**This analysis contained herein is based upon information Energy-Tel, LLC reasonably believes to be accurate.  However, they do not guarantee the accuracy of the analysis.**

 

THE LAST WORD:  “Be the change that you wish to see in the world.” -Mahatma Gandhi



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